Efforts to upgrade a key section of the Hollywood shopping and entertainment district, part of a revival that is making the area more attractive to locals and tourists, have taken a major step forward.
CIM Group, the district's largest commercial landlord, said it had agreed to acquire the Seven Seas building, a dilapidated structure that once housed a famous Hollywood Boulevard nightclub. At the request of the city's redevelopment agency, CIM plans to restore the edifice to its 1920s style.
It's the latest example of a wave of investment seeking to improve the formerly blighted neighborhood.
The Seven Seas building "has been a missing piece" in the real estate recovery along Hollywood Boulevard, said Helmi Hisserich, the Los Angeles Community Redevelopment Agency's regional administrator for Hollywood. "It's a beautiful historic building, but nobody can see its beauty."
The three-story building, across the street from Grauman's Chinese theater, stands out like a broken tooth in the blocks around Hollywood Boulevard and Highland Avenue that have benefited from hundreds of millions of dollars' worth of property improvements in recent years. Further transformation is underway, including new housing, stores and entertainment attractions.
The building's seller, infamous impresario Eddie Nash, agreed to part with the retail and office structure for an undisclosed price.
Nash, who owned the building for almost 50 years, said he finally agreed to sell after a CIM executive "wore me out."
Much of the time Nash owned it, and as far back as the 1930s, the building was the home of Seven Seas, a popular island-themed nightclub that once boasted live floor shows with music and dancers three times a night.
"It was a great hangout during [World War II] for soldiers and sailors on leave from the Pacific, or on the verge of going out," the late Times columnist Jack Smith once wrote. "There was a tin canopy over the bar, and every few minutes an artificial rainstorm would come, drumming on the tin like the rain on the roof of the Pago Pago rooming house in Somerset Maugham's 'Rain.' "
Like many other buildings in Hollywood, this one fell far and hard in the 1980s and 1990s when scores of businesses departed and the neighborhood earned a reputation for being disreputable and even dangerous.
The $650-million Hollywood and Highland retail, hotel and entertainment complex across the street was a financial debacle for its original owners after it opened in 2001. But the project helped spur other improvements nearby, including the creation of a studio next door to the Seven Seas building where ABC television's "Jimmy Kimmel Live" is taped.
Madame Tussauds, the legendary London wax museum, announced last October that it plans to build a flashy $55-million branch next to Grauman's.
With ownership of Nash's building, Hollywood-based CIM hopes to advance its strategy of trying to make the neighborhood appeal to locals and not just tourists, said Shaul Kuba, a principal at CIM who conducted a long campaign to acquire the property.
The company controls 12 office, retail and residential properties in Hollywood, including the Hollywood and Highland complex, the TV Guide building and the Sunset and Vine Tower.
One of the reasons the Hollywood and Highland complex struggled after it opened was that it had too many tourist-oriented businesses, such as fancy boutiques and a duty-free outlet, said Jeff Kreshek, CIM's head of leasing.
CIM is attempting to bring in businesses that would serve the daily needs of people who live and work in Hollywood, such as drugstores and fitness centers, as well as restaurants and boutiques.
CIM's heavy investment in the Seven Seas building may not be profitable in itself, but it could help create the kind of neighborhood that lifts the value of other company assets.
"They have a different way of calculating a return on their investment," the redevelopment agency's Hisserich said. "It's going to have a heavy impact on leasing and who comes into Hollywood as a whole."
Because of its location in a city-designated historic zone, developers who sought to improve the property were required to bring it up to historic standards, and others balked at that prospect, Hisserich said.
CIM agreed to meet federal standards for historic renovation, which are considered especially stringent, she said.
"It will be an example to owners down the boulevard about how to bring new life to these historic buildings," she said.
The property, currently in escrow, is worth about $35 million or more, according to a real estate broker who asked not to be named because he wasn't involved in the deal.
The building is mostly empty, its top two floors of offices boarded up. Ground floor retailers aim for the low end of the tourist market, selling maps to stars' homes, cheap T-shirts and Zippo lighters.